The presented paper aims to establish a strong basis for utilizing machine learning (ML) towards the prediction of the overall insulation health condition of medium voltage distribution transformers based on their oil test results. To validate the presented approach, the ML algorithms were tested on two databases of more than 1000 medium voltage transformer oil samples of ratings in the order of tens of MVA. The oil test results were acquired from in-service transformers (during oil sampling time) of two different utility companies in the gulf region. The illustrated procedure aimed to mimic a realistic scenario of how the utility would benefit from the use of different ML tools towards understanding the insulation health index of their transformers. This objective was achieved using two procedural steps. In the first step, three different data training and testing scenarios were used with several pattern recognition tools for classifying the transformer health condition based on the full set of input test features. In the second step, the same pattern recognition tools were used along with the three training/testing scenarios for a reduced number of test features. Also, a previously developed reduced model was the basis to reduce the needed number of tests for transformer health index calculations. It was found that reducing the number of tests did not influence the accuracy of the ML prediction models, which is considered as a significant advantage in terms of transformer asset management (TAM) cost reduction.